DWP May 2024 payment boosts for Universal Credit, benefits, pensions and cost of living

Cost of living support from benefits, pensions, grants and budget schemes is available for May 2024 as the income squeeze continues
Cost of living support from benefits, pensions, grants and budget schemes is available for May 2024 as the income squeeze continues and will include the new payment rates coming into effect for Universal Credit, PIP and the State Pension -Credit:Getty Images

The Department for Work and Pensions (DWP) has announced a series of benefit increases set to come into effect from May 2024. Despite the one-off cost of living payments ending with a £299 sum given out to more than eight million households in February, DWP and HMRC benefits are all getting a big boost.

The State Pension has gone up by 8.5 per cent in line with pay growth and all other benefits have risen by 6.7 per cent to match the inflation level last September, which is used as the basis for uprating calculations. The effects of these increases will start to be applied to most people during May.

Latest figures show the rate of inflation at 3.2 per cent in March, slightly higher than expected but down from 3.4 per cent in February and the lowest since September 2021. Cost of living pressures remain high although the energy price cap has been reduced to £1,690 per year from April for a typical household who use electricity and gas and pay by direct debit. This is £238 lower than the £1,928 cap that was in place until the end of March.


The rise in supermarket prices has also slowed down for the 14th month in a row, due mainly to an increase in promotional deals. Prices were 3.2 per cent higher than a year ago in the four weeks to April 14, dropping significantly from the 4.5 per cent recorded last month, said analysts Kantar.

Discounted items made up 29.3 per cent of supermarket sales, the highest level outside Christmas since June 2021. The increase in special offers handed an estimated £1.3 billion in savings to British shoppers, or £46 per household, according to the research.

However, petrol prices have gone up and are exceeding £1.50 per litre for the first time since November last year. Data collated by Fuel Prices Online shows typical pump prices reached 150.1p per litre on April 22. The average price of a litre of diesel is also at the highest level since November 2023, at 158.3p.

As UK households continue to battle with the ongoing income squeeze, this is all the help available in May 2024 from benefits, pensions and other cost of living support.

Benefits and pensions going up

DWP and HMRC benefits have increased by 6.7 per cent in line with inflation. The State Pension has had an even bigger boost of 8.5 per cent as pay growth became the dominant factor in the triple lock system used to determine pension uprating.

The new Housing Benefit and Council Tax Benefit rates both started from April 1 and Working Tax Credit and Child Tax Credit increases will be backdated to April 6. All other payment rates came into effect from April 8, the start of the first full week of the new financial year. New payment rates are all listed here.

Those who are paid weekly or fortnightly will have seen the new rates applied in April. This includes people claiming ESA (Employment and Support Allowance), Income Support and Jobseeker's Allowance, who are typically paid every two weeks.

Others who are paid every four weeks or monthly won't see the increased amounts until May or June as they will need a full payment cycle starting on or after April 8. The first Universal Credit recipients to see the new rates will be those with an assessment period running from April 8 to May 7 and subsequently paid on May 14. Anyone with an assessment period starting before April 8 or after April 26 will not see the new amounts until June - check out our full guide to UC payment dates here.

People who are paid (or who have opted to be paid) every four weeks, such as those on a State Pension, Carer's Allowance and Personal Independence Payment (PIP) will start seeing the new rates fully applied from Monday, May 6. As this is a bank holiday, any new amounts due that day should appear in accounts three days earlier, on Friday, May 4.

Bank holiday benefit payment changes

Two bank holidays in May will mean payment dates are brought forward for benefits and the State Pension. The list of payments affected includes:

  • Attendance Allowance

  • Carer's Allowance

  • Child Benefit

  • Disability Living Allowance

  • Employment and Support Allowance

  • Income Support

  • Jobseeker's Allowance

  • Pension Credit

  • Personal Independence Payment

  • State Pension

  • Universal Credit

  • Tax credits (such as Working Tax Credit)

Any payment due dates that happen to fall on either the Early May Bank Holiday or Spring Bank Holiday will be rescheduled to the previous Fridays. This means if your benefit or pension is due to go in on May 4, 5 or 6, it should be credited into your account on May 3. And any payments that would have been due on May 25, 26 or 27 will land on May 24 instead.

For the State Pension, this will only affect anyone normally paid on a Monday, which applies to those whose National Insurance number ends with two numbers between 00 and 19. In all cases, it will mean people get their payments earlier than usual.

Household Support Fund grants

The Government has extended the Household Support Fund, allocating an additional £500 million to local authorities to provide cost of living help to local people. The initiative had been due to finish at the end of March but will now continue from April 1 to September 30, 2024.

Councils in England are being given an additional £421 million to use over the six months from April, with the remainder going to the devolved administrations of Wales, Scotland and Northern Ireland for their own equivalent cash schemes. In Birmingham, the fund has previously been offering grants of up to £200, via the Birmingham Voluntary Service Council (BVSC), for people on specific benefits, which include:

The DWP said local authorities are encouraged to use the new funding "to meet immediate needs and help those who are struggling to afford household essentials including energy and water bills, food, and wider essentials. Authorities can also use funding to support households with housing costs where existing housing support does not meet this need, and to supplement support with signposting and advice."

Birmingham City Council and BVSC have not yet announced details of the new allocation of funds and how they will be distributing it.

Budgeting advances and loans

For those who need help with unexpected expenses, the DWP can offer financial assistance. Up to £812 can be borrowed through what are termed Budgeting Advances for Universal Credit claimants and Budgeting Loans for those on other benefits such as Income Support, income-based Jobseeker's Allowance, income-related Employment and Support Allowance (ESA), and Pension Credit.

In his Spring Budget in March, Chancellor Jeremy Hunt said: "Nearly one million households on Universal Credit take out budgeting advance loans to pay for more expensive emergencies like boiler repairs or help getting a job. To help make such loans more affordable, I have today decided to increase the repayment period for new loans from 12 months to 24 months."

The DWP has confirmed that these changes will come into effect from December 2024. Until then, if you're claiming through Universal Credit, you'll need to pay back the money in instalments over one year. However, it's worth noting that Budgeting Loans, available to those on other benefits, have always been repayable over two years, so you'll have twice as long in these circumstances.

To obtain an advance, you normally need to have been claiming benefits for six months or more, unless you need the money to help you start a new job or keep an existing one. You must also have earned less than £2,600 (£3,600 jointly for couples) in the past six months. Any previous budgeting advances must have been paid off before you can request another one.

Cost of living grants

You may be able to get a grant from charitable organisations that have various schemes to help people in need. These are usually in the form of money, products or services - and you won't have to pay anything back.

National charity and benefits advice service Turn2us has a handy guide to search for grants you may be able to apply for.

Extra childcare support

Starting from April 2024, existing childcare support is being expanded in phases, the Government announced. The changes are being introduced gradually to make sure that providers can accommodate the needs of additional families.

From April 2024, eligible working parents of two-year-olds are able to access 15 hours' childcare support. And then, from September this year, 15 hours of childcare support will be extended to eligible working parents of children from the age of nine months to three.

Universal Credit claimants can now claim back more for childcare costs. The DWP confirmed that working families who receive Universal Credit in England, Wales, Scotland and Northern Ireland can get back up to 85 per cent of their childcare costs.

Under the scheme, you pay for your childcare costs yourself and then report the amount to the DWP with receipts. The new amounts are:

  • Maximum for one child: £1014.63 from April 2024, an increase of £63.71

  • Maximum for two or more children: £1,739.37 from April 2024, an increase of £109.22

Parents on Universal Credit may also be able to get additional help with paying their childcare costs upfront when first moving into paid work or increasing their working hours. In this case, speak to your Universal Credit work coach who will decide if you qualify for cash from the Flexible Support Fund to cover the first set of childcare fees.

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